GVC annual report shows positive momentum

LSE-listed betting and gaming group GVC Holdings PLC delivered its 2016 Annual Report Thursday, describing the period as a momentous year which delivered both strong growth and substantive returns to its shareholders exceeding Board expectations.

The company reported results in Proforma format believing they provide a more accurate reflection of the company’s performance.

– Group Net Gaming Revenue increased 9 percent to Euro 894.6 million (2015: Euro 822.2 million) and by 12 percent in constant currency.

– Clean EBITDA increased 26 percent to Euro 205.7 million (2015: Euro 163.2 million), reflecting an increase in margin to 23 percent from 20 percent.

– Sports wagers reached Euro 4,553 million (2015: Euro 4,389 million), up 4 percent.

– Sports margin was 9.6 percent (2015: 8.5 percent)

– Statutory loss before tax of Euro 138.6 million reflects one-off costs in the year of Euro 117.8 million, largely related to the acquisition of bwin.party.

– Net debt as at 31 December 2016 was Euro 131.5 million.

GVC remains on target to secure Euro 125 million in synergies by the end of 2017, the report details, while annual capital expenditure is expected to be around Euro 20 million lower per annum than the combined Group spent in 2015.

The bwin sports label proved to be a star performer across its core European markets with first time deposits rising 37 percent and overall sports label revenues increasing 26 percent.

Although pro forma net gaming revenues from Games Labels for the full year declined to Euro 203.5 million (2015: Euro 211.8 million), GVC said it reversed the trend in the second half of 2016 achieving 4 percent growth in constant currency terms.

The party poker and party casino brands showed an improved performance directly attributed to a change in management and a more focused approach, the report reveals.

As GVC began 2017 with positive momentum and the integration of bwin.party largely complete, the group will focus on further M&A opportunities and continue to evolve its proprietary technology.

Trading to date has delivered a 15 percent increase in pro forma daily group net gaming revenues. Sports labels are up 18 percent and Games labels, up 6 percent.

The detailed report can be read here: http://www.gvc-plc-ir.co.uk/archive/pdf/GVC_Annual_Reports_2016.pdf